We develop a model that allows for public goods and status signaling through charitable contributions. This model provides a unified framework in which contributions are driven both by altruism and status signaling. We use this setup to re-examine the conventional practice of rendering a...

We study fair and efficient tax-benefit schemes based on income and non-income factors under partial control. Partial control means that each factor is a specific mixture of unobserved ability (randomly drawn by nature) and effort (chosen by individuals who differ in tastes). Factors differ in...

In this paper, we discuss a novel aspect of affirmative action policy. We examine its redistributive role, asking whether in an egalitarian society, supplementing the tax-transfer system with an affirmative action policy would enhance social welfare

This paper presents two arguments in favor of the sole use of an income tax for redistribution purposes. The first is that most findings on nonlinear commodity taxation such as Mirrlees's formulae for Pareto efficiency, Seade's results on zero tax rates at the endpoints of the scale, and the...

A method for handling monotonicity constraints in optimal control problems is applied in order to correct a technical weakness of optimal nonlinear taxation models with many commodities, caused by the neglect of a second order constraint for utility maximization. We conclude that all the optimal...

The standard model on optimal income taxation in the presence of tax evasion is extended to allow for mobility between the legal and hidden sectors. The conclusions from the traditional analysis of tax evasion strongly contrast with those that result when extensive margin responses are taken...